News: March 2014
Seed Enterprise Investment Scheme (SEIS)
The SEIS was introduced for a limited five year period from 1 April 2012. The SEIS has now been made permanent, with the income tax and capital gains tax reliefs applying as shown below for all future years.
|Rate of income tax relief||50%||50%|
|Maximum investment qualifying for income tax relief||£100,000||£100,000|
|Gains exempt from CGT relief on investment in SEIS shares:||50%||50%|
Venture Capital Trusts (VCTs)
Investing in VCT shares gives the taxpayer 30% income tax relief on up to £200,000 invested per tax year, and the shares are generally exempt from capital gains tax when sold. However, the Government thinks that VCTs have been abused, so the following changes will be made from 6 April 2014:
- tax relief is withdrawn if the shares are disposed of within five years;
- the VCT will not be permitted to return capital to its members within three years of the shares being subscribed for; and
- VCT investments that are linked to share buy-backs will be denied tax relief.
The ISA investment limits for 2014/15 were announced in December 2013 as:
|Shares and cash ISA||£11,280||£11,880|
|Cash only ISA||£5,760||£5,940|
|Junior ISA and Child Trust Fund||£3,720||£3,840|
However, this Budget includes the announcement that from 1 July 2014 the ISA rules will be reformed to extend the investment limits to:
|From||1 July 2014|
|New ISA – for shares and/ or cash||£15,000|
|Junior ISA and Child Trust Fund||£4,000|
ISAs will also be permitted to hold peer to peer loans as investments, and possibly other debt securities.
Individuals have been limited to the amount they hold in premium bonds to £30,000 per person since 2003. This cap will now be raised as follows:
- From 1 June 2014: £40,000
- From 2015/16: £50,000
There will also be two tax free prizes at the maximum level of £1 million awarded each month from August 2014.